As Christmas approaches, the crypto market is in a state of flux. Bitcoin has dropped 12% from its all – time high of $108,353, erasing December second – week gains, dampening hopes of a “Santa Claus” rally in 2024.
A CoinGecko report indicates that in eight out of ten years between 2014 and 2023, crypto markets rallied around Christmas. However, Bitcoin’s recent decline and reduced institutional investment have dimmed these hopes this year.
A “Santa Claus” rally refers to price gains in the last five trading days of the year and the first two trading days of the following year. With Bitcoin hovering around $97,000 on December 24, a pre – Christmas rally seems unlikely. It may gain post – Christmas if institutional interest revives.
The total market capitalization of crypto, excluding Bitcoin, has shown signs of recovery this week, with bullish signals on the daily chart. This makes an altcoin rally post – Christmas or in the first two days of 2025 more likely.
Coinglass data shows Bitcoin had over 50% gains in Q4 of both 2024 and 2023 as of December 24. Historically, bull runs in 2020, 2017, and 2013 ended with significant Q4 gains. But this quarter, Bitcoin’s performance has been lackluster. Institutional interest is waning, as seen by net outflows from Bitcoin Spot ETFs. With its Q4 performance below the median of 54.80%, retesting its all – time high before year – end seems unlikely.
The altcoin season index on Blockchaincenter.net, which evaluates the top 50 altcoins over 90 days, stands at 49 out of 100. While this indicates it’s not yet the altcoin season, nearly 50% of these altcoins have outperformed Bitcoin in the past 90 days.
Despite U.S. President – elect Donald Trump appointing three pro – crypto candidates (Stephen Miran, Paul Atkins, and David Sacks), Bitcoin’s price continues to decline.
South Korea, the world’s third – largest cryptocurrency market, has a significant impact. It delayed crypto taxation until 2027 and adopted a pro – crypto stance. Asian companies like MicroStrategy’s approach has inspired adoption. Chinese firm Meitu and Japanese firm Metaplanet have invested in Bitcoin, highlighting Asia’s role in driving BTC adoption.
Bitcoin derivatives traders are bullish on BTC gains across exchanges like Binance, OKX, and Deribit. The long/short ratio exceeds 1 across these platforms, and BTC has seen a spike in open interest, signaling higher relevance and demand among traders. Over $38 million in Bitcoin short positions were liquidated in the past 24 hours, as bullish sentiment prevails.
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